The Korea Development Institute raised its forecast for South Korea's 2025 economic growth to 3.2% from 2.5% and lifted its 2026 outlook to 2.2% from 1.7%, saying an AI-driven semiconductor boom is behind most of the upgrade while doing far less for employment and household spending. KDI said roughly 0.6 percentage point of the 0.7-point upward revision came from semiconductors and related spillover effects, with more than half of this year's 3.2% growth tied to the chip sector. It raised this year's export growth forecast to 8.7% from 4.6%, equipment investment to 7.9% from 3.3% and its current account surplus projection to $359.7 billion from $239 billion as the global memory chip market expands faster than it had expected in May. Even so, private consumption was lifted only marginally to 2.3% from 2.2%, while the employment growth forecast was cut to 110,000 from 170,000 because semiconductor production creates relatively few jobs and hiring remains weak in construction, non-semiconductor manufacturing and services, especially for young people. KDI said some of the chip-led gains may feed into domestic demand with a lag next year, but warned that South Korea's growing dependence on semiconductors could make the broader outlook more vulnerable if global AI investment weakens or chip competition intensifies.